Finding the ‘Gig’ in Gig Economy

By Sarthak Malhotra

In these growing times of technology, one can get a haircut with a few clicks at home and that too at his/her convenience. Isn’t it amazing, how this transition of the business world is enabling people with ease and comfort? But then again, an evident question arises about the workforce.

 

In the year 2020, amidst the world being hit by a fatal virus outbreak, it isn’t surprising to notice that the current workforce is a much-evolved form of the previous one - all thanks to the rapid process of digitization. Innovative technologies and resources have resulted in a paradigm shift in the way “work” is being executed, and one such noteworthy development is the rise of the ‘Gig Economy’.

 

‘Gig’ usually refers to a small, one-time, specific cause and contract based work. This simple concept is indeed revolutionizing the work culture all around the globe. Freelancing, contract-based, project-to-project based - these are all different names through which today’s employers identify gig economy. As mentioned earlier, the digitization of the workplace ecosystem has led to the loosening of primitively structured and regulated work modes. As an example, various operations of a business (especially non-core ones) have simply shifted from a 3x3 cubicle to a more flexible and unrestrained setting. 

 

The structure of a gig economy can be defined as a work engagement that has two major components – a service seeker and a service provider. However, it involves no rigid or permanent engagement between the two parties. All of the work is done on a project basis by the service provider. Occasionally, in this form of work economy, the above-mentioned parties are supported by an intermediary, which serves as a tech-enabled platform/aggregator connecting the two parties. For example, you (a service seeker) want a cab ride to someplace, so instead of hiring a driver, you opt to use Ola/Uber (aggregator), who in turn connects you with a cab driver (service provider). Just how easily were you able to avail of a specific service at a minimal cost?

 

The culture of the Gig economy is still at a budding stage in India. However, it is much more prevalent in the western economies of the USA since the 2010s. The gig economy generated a gross volume of $204 billion for customers globally in 2018. The United States is currently the world leader of the gig economy. The growth trajectory of the gig economy in the USA has been driven from the aspects of both, the organization and the freelancer. After the financial crisis in 2008, many firms witnessed a shrink in their size and thus, moved options to cost reduction. Gig workers provided them with contract-based work at a much lower cost. Also, among the people, the need for work independence and additional income needs made gig work popular. The rise in education levels and tech-literacy paved the way for higher growth globally. 

 

Currently, India stands as the 5th largest employer of the gig economy in the world. Technology up-gradation and corollary results like the growth of startups boosted the growth of the gig economy in India.

In the initial years, the gig economy was bound to highly skilled domains only, later, a substantial growth all across sectors including those with the low-skill requirement was witnessed. With India’s gig economy growing by leaps and bounds, its total addressable market is valued at 3.4 billion dollars. A study by PayPal reveals that every 1 in 4 freelancers belongs to India. Based on such alarming trends, the gig economy in India has the potential to grow up to $20-30 billion by 2025.

 

It is an obvious fact that such a booming growth trajectory is driven by a few strong factors. Majorly these factors can be categorized into psychological, need-based, organizational, and economic factors. Also, it is relevant to note that the growth, in this case, is a unique combination of push-pull factors from both the organizations and the gig workers. 

All aspects of a formal work structure are not that great – ask any corporate employee for affirmation. However, the standard pestering problems such as the 9 to 5 grind, Monday morning blues, appraisal jitters, and nosey colleagues are all in the past now. The new trend of ‘work-on-my-own-terms’ is actively driving the youth workforce towards choosing a freelancing job rather than the typical, formal, and modulated job. Among many reasons, flexibility appears to be the primary reason for motivation for Gen-X and Gen-Y to enter the gig economy. 

 

It is also found that the want for flexible work is driven by factors like freedom, technology upgrade, skill focus, and additional income. When a person opts for freelancing, they can determine the work quantum and can choose for 3-4 assignments at once or even a single assignment at times. With specific and project-based work, he can choose the kind of work as per his convenience. The wide range of job profiles that the gig economy offers is another bonus point for workers. From a high skill work like Consulting or SEO handling to low skill work of a delivery boy or a cleaner, it provides an opportunity for all work types, thus generating a large base for employment opportunities.

 

Looking at things from the service seeker’s viewpoint, the scenario appears to be suitably advantageous as well. Imagine getting your work done on a specific, on-demand basis, and with added convenience. In an escalating world of competition, businesses are always on a lookout for cutting down the costs and bringing in maximum efficiency. The gig economy offers this advantage of cost optimization to firms. Getting work done and outsourcing non-core operations on a contract basis, save firms from the administration and compliance costs of hiring permanent staff. A study states that over a third of 500+ organizations expect to rely on up to 50% of flexible and freelancing talent. Activities like content writing, design, and development are some of the most utilized contemporary gig services by employers across the globe. 


 

While the gig culture sounds impressive and extremely useful, it has a few disadvantages as well. Job security remains a constant concern for gig workers all across the globe. In the gig economy, the lack of job security and the absence of protection laws make them highly vulnerable to exploitation. For instance, gig workers are often not eligible for social security benefits and perks like sick leaves. With different industry standards being followed in different regions wages can be changed at any time, and minimum wage laws do not apply. Additionally, there is a constant unpredictability looming over the work quantum as the market in the gig economy is of low barrier and high competition.

 

The gig economy is at its peak with no plans of slowing down as the increasing levels of digitization around the globe are increasing the culture of remote working. With new arenas available under the gig economy, fresh entrants to the workforce are looking towards more opportunities. However, it is also evident that business environments are dynamic and are bound to experience changes. At times, the changes can be significant, just like the pandemic outbreak of Covid-19. This externality has substantially affected the gig economy. With an increase in calls for physical distancing, lesser consumers are opting for services like cab rides, renting vacation homes, or at-home salon services. There has been a decline in participation on many digital platforms. These digital platforms were the main sources of employment for gig workers. At the same time, it is very important to behold the benefits that the gig economy can serve, given its ‘remote’ working style. The platform enabled delivery portals witnessing more engagements as it allows people to practice social distancing and fulfilling convenience at the same time. College students have started taking teaching as a gig profession through various e-learning platforms, thus overcoming the loss of education due to the lockdown. 

 

The gig economy is helping employers complete projects without full-time hiring, thus helping them save costs in distress and grow with external expertise. With the evolution of time, the gig economy is getting its much-deserved consideration, with new labour laws for gig workers on the card. Gig working is no longer being treated as an ‘alternative’ to full-time work. Organizations are accepting gig workers to be a part of their teams. With such a positive trend, even in difficult times like these, the ‘gigging’ is definitely here to stay. 

Sources:

  1. Article: India's growing gig economy: Are we ready for this change? — People Matters

  2. What is the Gig Economy? Definition, How It Works, More - Wonolo

  3. I have a ‘gig’ tomorrow. Do you? | The Connectere

  4. What Are The Pros And Cons Of The Gig Economy?

  5. How Is Gig Economy Redefining The Job Trends In India - BW people

  6. The Future of Work: The Rise of the Gig Economy

  7. Gig economy remains strong, though in-demand skills shift | HR Dive

  8. (PDF) Gig Economy in Indian Perspective.

  9. Gig Economy – Shaping the Future of Work

  10. India And The Gig Economy - Employment and HR - India

  11. How India can tap the rise of the millennial gig worker — Quartz India

  12. Is India ready to embrace the gig economy?

  13. How the gig economy is changing the workforce | EY - Global